Stellar Biotechnologies reported financial results for the three and nine months ended June 30, 2017 and provided an update on its business.
During the first nine months of the year, the company reported continuing progress across its initiatives to optimize and expand its manufacturing capacity at its primary production facility in California. Stellar's current manufacturing systems, which were originally developed to provide clinical-stage quantities of its KLH carrier molecule, currently support multiple KLH therapies in advanced clinical studies. These studies include Alzheimer's disease, lupus and metastatic breast cancer.
"We now have multiple customers with Phase 2 clinical studies that are fully enrolled and underway, and we are preparing for the impact that favorable clinical results could have on the KLH market and our supply capabilities," said Stellar President and CEO Frank Oakes. "We plan to incrementally increase our production capacity and manufacturing capabilities in line with the needs of our customers and to maintain our leadership position in the sustainable production of controlled, fully traceable KLH."
Total revenues were $0.02 million for the quarter ended June 30, 2017 compared to $0.18 million for same period last year. The change was due to a decrease in product sales volume. While the company's customer base has not changed significantly, product sales volumes are subject to variability associated with the rate of development and progression of clinical studies of third-party products that utilize Stellar KLH. For the three months ended June 30, 2017, product sales consisted of lower volume orders for pre-clinical studies and immune system assays. For the three months ended June 30, 2016, product sales primarily consisted of higher volume orders for later stage clinical studies. The rate of progression towards later stage studies is expected to continue to affect the timing and volume of future product sales.
Total expenses decreased by $0.06 million to $1.31 million for the quarter ended June 30, 2017, compared to $1.37 million for the same period last year.
Costs of sales and contract services decreased by $0.04 million to $0.08 million for the quarter ended June 30, 2017, compared to $0.12 million for the same period last year primarily due to decreased product sales.
Research and development expenses increased by $0.07 million to $0.54 million for the quarter ended June 30, 2017, compared to $0.47 million for the same period last year. The increase was primarily due to research and development activities intended to increase the scalability and throughput capacity of existing manufacturing systems; improvements in analytical, manufacturing, and purification processes; stability studies; and formulation development.
General and administrative expenses decreased by $0.08 million to $0.64 million for the three months ended June 30, 2017 compared to $0.72 million for the same period last year primarily due to management's actions to reduce corporate expenses, including travel and professional fees, as well as lower legal fees and public company expenses.
For the third quarter of fiscal year 2017, Stellar reported a net loss of $1.22 million, or $0.12 per basic share, compared to a net loss of $1.19 million, or $0.14 per basic share, for the same period last year.
Total revenues were $0.23 million for the nine months ended June 30, 2017 compared to $1.0 million for the same period last year. The change was primarily due to a decrease in product sales. While the company's customer base has not changed significantly, product sales volumes are subject to variability associated with the rate of development and progression of clinical studies of third-party products that utilize Stellar KLH. For the nine months ended June 30, 2017, product sales consisted of KLH for clinical and pre-clinical studies and immune system assays. For the nine months ended June 30, 2016, product orders primarily consisted of higher volume orders for later stage clinical studies. Total revenues were also impacted by a decrease in the number of significant customers who purchased the company's products and services, with two customers representing 85% of total revenue for the current period compared to five customers representing 91% of total revenue for the same period last year.
Total expenses decreased by $0.51 million to $4.08 million for the nine months ended June 30, 2017 compared to $4.59 million for the same period last year.
Costs of sales and contract services decreased by $0.47 million to $0.23 million for the nine months ended June 30, 2017 compared to $0.70 million for the same period last year primarily due to decreased product sales.
Research and development expenses increased by $0.26 million to $1.33 million for the nine months ended June 30, 2017 compared to $1.07 million for the same period last year. The increase was primarily due to research and development activities intended to increase the scalability and throughput capacity of existing manufacturing systems; improvements in analytical, manufacturing, and purification processes; stability studies; and formulation development.
General and administrative expenses decreased by $0.28 million to $2.31 million for the nine months ended June 30, 2017 compared to $2.60 million for the same period last year primarily due to management's actions to reduce corporate expenses, including travel and professional fees, as well as lower legal fees and public company expenses.
For the first nine months of fiscal year 2017, Stellar reported a net loss of $3.81 million, or $0.38 per basic share, compared to a net loss of $3.68 million, or $0.44 per basic share, for the same period last year.
At June 30, 2017, the company had working capital of approximately $7.69 million. Cash, cash equivalents and short-term investments totaled $7.65 million.